GST on imported solar panels reduced to 10pc
ISLAMABAD: Deputy Prime Minister and Foreign Minister Ishaq Dar said that the digital sales tax on services would remain within the jurisdiction of provinces and proposed general sales tax (GST)on solar panels has been reduced from 18 per cent to 10 per cent.
Speaking on the floor of the National Assembly on Wednesday, Dar said that after detailed discussions with coalition partners and relevant stakeholders, consensus had been reached on resolving several contentious budgetary issues.
He said that as part of the revisions, it was agreed that the imposition of digital sales tax on services falls under the constitutional domain of provincial governments. 'The concerns regarding digital taxation were valid. We held in-depth consultations with all stakeholders, including the Federal Board of Revenue (FBR), and it has been decided that the matter will be clearly addressed in the finance minister's budget winding-up speech.'
NA panel rejects 18pc GST on solar panels
He said that the earlier proposal of imposing 18 per cent general sales tax (GST) on solar panels had sparked considerable debate. Upon review, he said that it was revealed that 54 per cent of components used in solarisation were already taxed under the existing regime, and the 18 per cent tax applied only to the remaining 46 per cent. However, after mutual consultations, we have now proposed reducing the solar GST from 18 per cent to 10 per cent, he announced.
The deputy prime minister said that tax proposals are essential for revenue generation, and any relief in one area necessitates compensation elsewhere. He pointed out that when the cabinet found the initial proposal of a six per cent salary increase for government employees insufficient and raised it to 10 per cent, corresponding budgetary adjustments also had to be made. 'We must move forward collectively.
Our approach is rooted in consensus and cooperation.' Highlighting another key issue, he said it was decided to maintain funding for proposed universities in Sindh under the Public Sector Development Programme (PSDP) at Rs4.7 billion through the Higher Education Commission (HEC). He said that fund would be released for the universities.
The deputy prime minister acknowledged valid concerns raised by the members of the house about the closure of the Public Works Department (PWD) and confirmed that the Pakistan Infrastructure Development Company Limited (PIDCL) would now oversee all federal development projects across provinces.
He said that the PIDCL was initially formed for Sindh, but its mandate has now been expanded to oversee development projects across all provinces.
Dar concluded by reaffirming the government's willingness to address genuine concerns through mutual dialogue and constructive engagement.
Pakistan People's Party (PPP) senior leader Syed Naveed Qamar thanked Prime Minister Shehbaz Sharif and Deputy Prime Minister Ishaq Dar for accommodating the proposals of the party and Sindh government. 'We had wanted to reduce all 18 per cent tax on solar panels but it cannot do so. After approval of budget, a committee will be formed to discuss further reduce tax on solar panels.'
He also acknowledged the government's decision to expand the mandate of the Pakistan Infrastructure Development Company Limited (PIDCL) to all provinces, instead of limiting it to Sindh, effectively addressing another PPP concern.
Aijaz Hussain Jakhrani highlighted the steps being taken by Sindh government for development of Karachi including its health infrastructure. He said that we also want to eliminate arrest power of Federal Board of Revenue (FBR).
He also said that the Sukkur-Hyderabad Motorway is a vital need of the people and urged the authorities to pay attention to the project.
Earlier, legislators from both opposition and treasury benches called for the establishment of Special Agriculture Zones, IT Facilitation Centres nationwide, increased farmer support, and funding for churches and temples to promote economic growth and social inclusion.
Resuming general budget discussions on the fifth day in the National Assembly, Dr Zulfikar Ali Bhatti of PML-N stressed the need to develop rural areas and strengthen the agricultural sector.
He proposed the establishment of Special Agriculture Zones nationwide, equipped with all necessary facilities to enhance agricultural productivity.
He also advocated for providing incentives to farmers. Additionally, he called for the creation of IT facilitation centres in rural regions and the implementation of skill development programs for youth, particularly in these areas, to promote self-sufficiency.
Fatehullah Khan of PPP strongly denounced Israel's aggression against Iran. Drawing attention to the suffering of flood victims in his constituency, he urged the government to provide compensation to those affected.
Awais Haider Jhakar of the Sunni Ittehad Council (SIC) highlighted the challenges faced by farmers and criticised government policies that have contributed to a decline in agricultural production.
Sanjay Parwani of the MQM criticised the government for failing to allocate what he described as even a single penny for the country's churches and temples in the 2025-26 federal budget.
Abdul Ghafoor Haideri of JUI-F urged the Deputy Speaker Ghulam Mustafa Shah to issue a ruling demanding strict punishment for the miscreants involved in the attempted abduction of Maulana Fazlur Rehman's son and called for the immediate arrest of those responsible.
PPP's Zulfiqar Ali Behan called for the imposition of an agricultural emergency in the country and the removal of taxes on fertilisers to boost agricultural production.
Chaudhry Mubeen Arif Jatt of SIC called for the immediate withdrawal of the proposed 18 percent GST on solar panels. He also highlighted the hardships faced by farmers, noting that their produce is being sold at prices lower than their production costs.
Chaudhry Riazul Haq of PML-N demanded a review of the Federal Board of Revenue (FBR)'s excessive powers and emphasised the need to lower fertiliser prices.
Sohail Sultan said that it is the government's duty to provide relief to the people. He urged the government to increase the monthly income of labourers and suggested including youth programmes in the current budget.
Parliamentary Secretary Sajid Mehdi lauded the armed forces and their chiefs for performing outstanding performance against the Indian aggression against Pakistan.
He said that Pakistan is far behind in modern agriculture, lamenting that we cannot even produce the seed of any crop. He linked the development of the country with the agriculture sector, adding, we cannot progress unless we develop agriculture sector.
He said that a small relief was given to farmers in the shape of solar power but the government imposed tax on this facility which is injustice. He demanded that the pesticides and fertiliser be tax-free.
Mahtab Akbar Rashdi, Muhammad Moeen Wattoo, Rai Hassan Nawaz Khan, Chaudhry Anwarul Haq, Nasir Iqbal, Musa Gilani, Ali Jadoon, and others participated in the budget debate.
Copyright Business Recorder, 2025
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